Small business health insurance could help groups in Colorado save on health coverage.
Updated August 7, 2019
Between its beautiful sites, its eclectic culture, and its strong, vibrant economy, Colorado has a lot to offer! Case in point: it has the uncommon distinction of being both one of the nation’s healthiest states and one of its best places for doing business, according to Forbes. Understandably, this makes Colorado a desirable place for small business owners and entrepreneurs to be.
If you have a small group that may be able to qualify for small business health insurance in Colorado, eHealth is the perfect place to get started. We are your advocates for small group health insurance—not only will we make shopping for plans easy, but we help you throughout applying, enrollment, and even after you have purchased your group coverage.
How does small business health insurance in Colorado work?
If you buy on eHealth, you can immediately start comparing quotes on plans on our Colorado small business health insurance page.
Small business health insurance is a type of coverage that applies to several enrolled members of a group. In order to apply for small business health insurance, you need to have at least two members (so even an owner with one employee can get group coverage). In fact, eHealth found in 2018 that the average employer group applying for health insurance had 3.9 covered employees, which might be explained by the expensive plans in the unstable individual market.
- Cost sharing—as an employee covered under a group plan, your premium is usually split with your employer. This means employees are often paying less for their individual premium they pay every month in order to continue being part of the covered group.
- Tax benefits—since an employee’s share of the health insurance is usually taken straight out of his or her paycheck, it comes from pre-tax dollars. If your employees have to buy individual health insurance plans on their own, they will have to pay with post-tax money.
- Risk pool advantage—due to being a larger pool than just an individual or family, premiums on small group plans are often cheaper per individual. According to the Small Business Association, the idea of risk pooling is fundamental to the idea of health insurance, and it’s based on the idea that the more people that are covered, the more stable the average costs become. This cost-reducing element of group coverage is helpful for both the employer and the employees.
What special incentives are available for providing group coverage in Colorado?
Like many states, Colorado makes a concerted effort to ensure that as many people as possible are able to afford health insurance. The state has thus created a number of incentives that encourage small businesses to provide group coverage for their employees, including:
- Income Tax Deductions– Colorado offers a deduction for healthcare expenses on its state income tax. Residents can exclude the cost of employer group coverage from their taxable income. This program also provides a deduction for those who purchase their health insurance individually.
- Medical Savings Accounts– Under Colorado law, employers can establish Medical Savings Accounts for their employees. This allows them to contribute money to pay for group coverage without having that money be subject to taxation. They may contribute as much as $3,000 a year for each worker to such an account. This program is available for all employers who provide group coverage, regardless of the size of their businesses.
Group and employee definitions vary by insurance company and state, so be sure to check with a licensed insurance agent to find out the details for your specific situation.
This article is for general information and may not be updated after publication. Consult your own tax, accounting, or legal advisor instead of relying on this article as tax, accounting, or legal advice.